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Fidelity^® Limited Duration Bond Strategy

This separately managed account seeks to provide a stream of income while limiting risk to principal over a full market cycle.

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A diversified portfolio of investment-grade¹ taxable bonds and a completion fund to provide exposure to securitized bonds.

A fixed income team leveraging Fidelity's extensive resources and research capabilities

Seeks to provide a balance between income potential and risk

Summary

Types of investments

Primarily A– or higher investment-grade taxable bonds² and a completion fund providing exposure to securitized bonds.

Investment strategy

Seeks to deliver income, while limiting risk to principal

Minimum investment

$350,000³

Annual advisory fee

0.35%–0.40%⁴

(Varies based on total assets invested)

The completion fund is a proprietary mutual fund that has an expense ratio of zero and is designed exclusively for use in our managed account programs. The strategy provides a diversified and more liquid exposure to securitized bonds compared to what could be achieved by purchasing those bonds as individual securities. It contains securitized exposure such as asset-backed securities (ABS), commercial mortgage-backed securities (CMBS), and mortgage-backed securities (MBS).

More info

Meet the investment management team

Read how fixed income can fit into an investment portfolio (PDF)

FAQs

Fidelity^® Limited Duration Bond strategy FAQs

How can this strategy help me meet my goals?

Investing in a portfolio of taxable bonds can be an attractive option for investors who want broad exposure to investment-grade bonds¹ or are seeking a source of income.

This separately managed account is designed to offer investors a diversified portfolio of investment-grade taxable bonds¹ that is designed to deliver income, while limiting risk to principal over a full market cycle. Unlike some other investment vehicles, a separately managed account allows account holders to directly own the bonds, so they will know the bonds the manager has selected for their accounts and how their investments are being managed.
Who manages my money?

Fidelity Personal and Workplace Advisors LLC (FPWA), has engaged Fidelity Management & Research Company LLC, a registered investment adviser and a Fidelity Investments company, to provide the day-to-day discretionary portfolio management of Fidelity Limited Duration Bond Strategy accounts, including investment selection and trade execution, subject to FPWA's oversight.

The investment team at Fidelity Management & Research Company LLC will construct each portfolio and make the day-to-day investment and trading decisions for each account. Fidelity Management & Research Company LLC's team of analysts, portfolio managers, and traders specialize in the fixed income market and work together to monitor both the markets and the accounts to uncover hidden opportunities in different types of markets. Their careful market analysis enables them to build diversified bond strategies that include a range of issuers, regions, sectors, and maturities to generate income while seeking to help manage risk.
What kind of investments can I expect in my account?

The investment team will typically select 30-80 bonds⁵ per account. They may invest in a mix of corporate bonds, U.S. Treasuries, government agencies, taxable municipal bonds, floating-rate bonds, and provide exposure to securitized bonds through the use of a completion fund. Each account will contain investment-grade taxable bonds rated BBB− or higher at time of purchase.² The investment team will seek to maintain an overall portfolio credit rating average of A−.² Please be aware that lower rated bonds do carry additional risk compared to higher rated bonds.
How are the bonds chosen for my account?

The investment team looks at many factors when assessing risk for each proposed bond, including but not limited to, issuer specific credit risk, sector risk, interest rate risk, and liquidity risk. The team assigns a proprietary credit rating to each bond they purchase which is independent of the rating agencies. The team focuses on selecting investment-grade bonds which offer strong relative value in an effort to generate income while seeking to limit risk to the money invested.

Each account is diversified across a variety of sectors and maturities to help ensure it is not concentrated in any one area, can better handle changes in interest rates, and can potentially help reduce overall risk to principal over the long-term.
Can I choose my own investments?

The investment team at Fidelity Management & Research Company LLC will select all bonds for each account. They may be able to build an investor's portfolio around certain investment-grade taxable bonds already owned, provided the bonds meet the selection criteria and overall portfolio investment guidelines.
How long will it take to invest my account?

In general, under normal market conditions, it will take 60 to 90 days⁵ to construct a complete portfolio. Each account is reviewed daily, yet it is normal to not see initial trades for the first few weeks. The investment team at Fidelity Management & Research Company LLC takes great effort in creating thoughtfully researched, personalized portfolios that are designed for each client's financial goals, and will carefully evaluate each bond selected in an effort to create a portfolio that is well-diversified across sectors and maturities.
Can I add funds to my account?

Yes, investors can add funds to their account.
Can I withdraw funds from my account?

Yes, an investor can request a withdrawal from his or her account at any time, with no Fidelity fees or penalties. We will process all withdrawal requests promptly, but please note that it may take several business days to complete a withdrawal.
What is the account minimum?

The minimum funding amount is $350,000.³ Accounts can be funded with a check, bank wire, an exchange of assets from an existing Fidelity account, or a transfer of eligible assets from an account at another institution. Accounts using eligible in-kind funding also have a minimum funding amount of $350,000.
How much does it cost?

The annual advisory fee ranges from 0.35% to 0.40% based on account balance.⁴